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Tesla electric car company gets short reprieve from Christie administration

TESLA NJ.JPG

A Tesla Motors Inc. Model S connected to a charger sits on display at the company's store at the Short Hills Mall in Short Hills, New Jersey. Gov. Chris Christie's administration has given Tesla a short reprieve to continue selling cars in New Jersey.
(Bloomberg)

TRENTON — With days to go before it was to be barred from selling cars in New Jersey directly to consumers, Gov. Chris Christie’s administration has given Tesla a short reprieve.

The New Jersey Motor Vehicle Commission will allow the electric car manufacturer to keep selling vehicles at its two New Jersey showrooms until April 15th, it announced today.

“The MVC this week sent out letters to all new car dealers,” commission spokeswoman Elyse Coffey said. “The letter explains that dealers who sell new cars are being given until April 15th to comply with MVC dealer licensing regulations that require the submission of a copy of their franchise agreement.”

Coffey declined to comment further. A spokeswoman for Tesla did not respond to an email seeking comment.

On March 11, the commission – made up of Christie cabinet officials and appointees – unanimously passed a rule to take effect on April 1 that would require the company to sell its cars through dealers, which is contrary to its sales model.

The ruling drew outrage from Tesla's founder, Elon Musk, as well as Democrats and environmentalists.

Even though the MVC had given Tesla a license to sell its cares in 2012, Christie defended the decision, noting that a state law dating to the 1970s prohibits auto manufacturers from selling direct to consumers and requires them to use dealerships.

“My job is not to make the laws, it’s to enforce the laws. And Tesla was operating outside the law,” Christie said earlier this month.

“They make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car,” Musk wrote.

While the reprieve is short, it may just be enough to keep Tesla in business in New Jersey, said one lawmaker.

Assemblyman Tim Eustace (D-Bergen), who drives an electric car, said he believes Assembly leaders are open to fast-tracking his bill (A3096) that would allow manufacturers of zero-emission vehicles to sell directly to New Jersey consumers by exempting them from the franchise rules, so long as the cars make up less than 4 percent of those sold in New Jersey.

Although the Assembly doesn’t have any meetings scheduled in that time frame, Eustace said members were already aware they might have to return to Trenton to deal with other pressing issues. He noted that Assembly Majority Lou Greenwald (D-Camden) has signed on as a sponsor.

“That may help. Maybe we’ll get something done in 15 days,” Eustace said. “The governor said in one of his town halls last week that he wanted a solution to this. I’ll take him at his word.”

The New Jersey Coalition of Automotive Retailers had pushed to ban Tesla sales in New Jersey. But Jim Appleton, the group's president, said he thinks Eustace's bill is reasonable, though he cautioned that he doesn't know its details yet.

"To the extent that there is legislation that would allow an all-zero emission vehicle automaker to enter the market for a period of time without franchises, before they eventually convert to a franchise system, it makes sense," Appleton said.